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COVID-19: State and federal efforts to improve access to testing, treatment, and health coverage

Elected bodies and state agencies are taking action to expand access to health coverage and treatment during the current pandemic.

Several states are requiring state-regulated health plans to cover COVID-19 telehealth with no cost sharing. | Image: fizkes / stock.adobe.com

Reviewed by our health policy panel.

The coronavirus pandemic has turned life on its head worldwide. And the fact that it’s a widespread health crisis is shining a light on the myriad cracks and flaws in the American health care system. But numerous new state and federal regulations have been implemented over the past year that aim to improve Americans’ access to testing and treatment for COVID-19.

We’re using this page to keep track of the changes that affect health insurance coverage for medical care related to the pandemic, and will continue to update it as the situation evolves.

Special enrollment period to ensure people can get coverage for 2021

White House

An executive order signed by President Biden has authorized a COVID-related special enrollment period on HealthCare.gov. The SEP will run from February 15 to May 15.

Unlike most of the other developed countries that have been hit with the COVID-19 pandemic, a significant portion of the U.S. population has no medical insurance. (This would be far worse without the Affordable Care Act: A decade ago, before it was enacted, there were more than 46 million uninsured Americans, and that has since dropped to about 27 million people.)

Open enrollment for 2021 coverage started November 1 and ended on December 15 in most states. Most of the state-run health insurance exchanges offered extended open enrollment periods, but those had mostly ended by mid-January 2021.

However, the Biden administration has prioritized reopening the marketplace and funding a marketing/outreach effort to publicize the opportunity to enroll and the financial assistance available to people. In late January 2021, the administration announced that a special enrollment period on HealthCare.gov would run from February 15 to May 15, 2021. And although the focus is on getting uninsured people covered, people who are already enrolled in plans through HealthCare.gov will be allowed to switch to another plan during this window.

Insurers, consumer advocates, governors, attorneys general, and insurance commissioners had asked the Trump administration to offer a similar special enrollment period to address the pandemic in the spring/summer of 2020, but the Trump administration refused to do so. Nearly all of the state-run marketplaces did offer COVID-related special enrollment periods in 2020. And all of them are following the federal government’s lead in 2021, reopening enrollment mostly in line with the special enrollment period that’s being offered on HealthCare.gov. The 15 fully state-run marketplaces have announced the following COVID-related special enrollment periods in 2021 (some are limited to uninsured residents or only to people who don’t already have on-exchange coverage, while others are taking the more flexible approach that HealthCare.gov is using):

In some of the state-run exchanges, the COVID-related enrollment window only applies to people who are uninsured (as opposed to people who already have coverage through the exchange and want to select a different plan; in those states, people in that situation would need a qualifying event in order to make a plan change). But Medicaid enrollment is available year-round to eligible residents and is a crucial safety net when a household’s income drops suddenly.

Here’s more about how to go about securing coverage if you’re facing the loss of your current health plan.

Actions some HealthCare.gov states took in 2020 to get people covered

New Mexico operates a state-run exchange but uses HealthCare.gov for enrollment (until the fall of 2021), which means the state could not issue a special enrollment period in 2020. But New Mexico opened up the state’s high-risk pool to residents who were uninsured, not able to obtain other health coverage, and who believed they may have COVID-19.

Kentucky also has a state-run exchange that uses the HealthCare.gov enrollment platform (also until the fall of 2021). But the state opened up its Medicaid program to offer temporary coverage to people who didn’t have health insurance. The coverage is available regardless of income. Details are posted on the Kentucky Department for Medicaid Services website.

Illinois submitted a federal waiver to give uninsured COVID-19 patients coverage under the state Medicaid program. And Oregon secured a waiver approval that allowed the state to enroll residents without income verification

Of the states that run their own exchange platforms, only Idaho did not open a COVID-19 special enrollment period for uninsured residents. Idaho officials said this was because their “enhanced” short-term health plans are available year-round, although it’s important to understand that although these plans are much more regulated than normal short-term health plans, they are not ACA-compliant and do still involve some medical underwriting.

Medicaid disenrollment freeze nationwide

Under the Families First Coronavirus Act, enacted in March 2020, states are essentially barred from disenrolling people from their Medicaid rolls for the duration of the public emergency period (currently effective through April 21, 2021, although it’s been extended multiple times since the pandemic began). Because all of the states are receiving additional federal Medicaid funding during the pandemic, they’re only allowed to disenroll people from Medicaid if the person requests it or moves out of the state.

Additional unemployment income and its effect on eligibility for financial assistance with health coverage

Eligibility for Medicaid, premium subsidies, and cost-sharing reductions is based on an ACA-specific modified adjusted gross income. The Coronavirus Aid, Relief, and Economic Security (CARES) Act included a provision to give people receiving unemployment benefits an additional $600/week, through the end of July 2020. The additional $600/week is not counted as part of a person’s ACA-specific MAGI when eligibility for Medicaid is determined, but it is counted when eligibility for premium subsidies and cost-sharing reductions is determined.

Medicaid eligibility is based on current monthly income, which means a person who has lost their income might qualify for Medicaid (in a state that has expanded Medicaid under the ACA), even if they were earning a substantial income prior to losing their job. But since the extra $600/week in unemployment benefits does get counted for premium subsidy eligibility, it can help to make people eligible for assistance in states that haven’t expanded Medicaid, helping them avoid the coverage gap.

Eligibility for premium subsidies and cost-sharing reductions is based on ACA-specific MAGI for the entire year, so it includes income a person earned earlier in the year, any unemployment benefits (including the extra $600/week in federal pandemic benefits), and any income that might be earned later in the year. This will all be reconciled on tax returns that are filed in early 2021.

CMS allowed insurers to pay MLR rebates early in 2020

Under the ACA’s medical loss ratio rule, health insurers that offer individual or group health insurance coverage are required to spend at least 80 percent of premiums on medical care, and no more than 20 percent on administrative costs (for large group plans, at least 80 percent of premiums must be spent on medical care). Insurers that don’t meet these requirements have to send rebates to their enrollees to account for premiums that were essentially set too high. Over the last eight years, insurers have sent rebates that totaled about $5.3 billion.

MLR rebates are based on a three-year rolling average of premium revenue versus claims costs and administrative costs. Each year, insurers have until July 31 to submit their MLR data to the federal government. Insurers that didn’t meet the MLR requirements then have to either send rebate checks by the end of September, or apply the rebate amount to enrollees’ premiums starting with the first premium due on or after September 30. So a person’s October premium could be partially or fully offset by an MLR rebate (as well as additional months, if the rebate is larger than one month’s premium).

To address the COVID-19 pandemic and the fact that many people are struggling to pay their premiums this summer, CMS has issued guidance allowing insurers to estimate MLR rebates and provide premium credits prior to the end of September this year. Insurers will have until August 17 to submit official MLR data to CMS, but they have the option to send lump-sum checks before the data is officially reported, and they have the option to start providing premium credits as soon as they’re able to do so, without having to wait until the October billing cycle. The CMS guidance only gives insurers flexibility on this issue; insurers are not required to estimate and prepay MLR rebates. But some will likely do so, as it will help them to retain customers during a time when many people are struggling financially.

Total MLR rebates that insurers send to their customers in 2020 are expected to hit a record high, so this could be a welcome relief for some individuals and businesses.

Federal law mandates full coverage of COVID-19 testing

The Families First Coronavirus Response Act (H.R.6201), signed into law on March 17, requires nearly all health plans – including Medicare and Medicaid – to pay for COVID-19 testing, including the lab fees and the fees associated with the doctor’s office, urgent care clinic, or emergency room where the test is administered. For the duration of the COVID-19 emergency period, health plans cannot impose any cost-sharing or prior authorization requirements for COVID-19 testing.

Numerous states had already implemented similar regulations, but states can only regulate fully insured health plans. The federal government had to step in to require self-insured plans to fully cover COVID-19 testing, and to address the issue in the states that hadn’t taken action on their own. 

H.R.6201 does not apply to short-term health plans, healthcare sharing ministry plans, or other health plans that aren’t considered minimum essential coverage. But Washington state’s COVID-19 testing requirements (which have been extended through July 3) do apply to short-term health plans, requiring them to cover testing with no cost-sharing, just like other health plans (North Dakota’s bulletin also applies to short-term plans, but it asks, rather than requires, insurers to waive cost-sharing for COVID-19 testing).

Washington state has also expanded the no-cost testing guidelines to include tests for influenza, RSV, norovirus, and other coronaviruses, as long as they’re billed in conjunction with a diagnosis code related to COVID-19. Wyoming is also requiring health insurers to waive the cost of diagnostic testing for influenza and RSV. New Mexico is also requiring insurers to waive cost sharing for influenza and pneumonia texting (and treatment, as described below).

Numerous insurers voluntarily waiving cost sharing for COVID-19 treatment

Although COVID-19 testing is now covered without any cost sharing on nearly all health insurance plans, the federal rules (and most state rules) still allow for normal cost-sharing (deductible, copays, and coinsurance) when people need treatment for the disease. Especially if treatment involves a hospital stay, people are likely to end up hitting their plan’s maximum out-of-pocket, which can be several thousand dollars, depending on the plans.

But several insurers are stepping up to voluntarily waive cost sharing for COVID-19 treatment. Anthem, UnitedHealthcare, Humana and Cigna have announced that their members will not have to pay any cost sharing for in-network treatment related to COVID-19, including inpatient care (this applies only through May 31 for Anthem, UnitedHealthcare and Cigna, although Human has not imposed an end-date). Humana no longer offers individual market coverage, but the announcement does apply to individual market enrollees who have coverage under an Anthem, Cigna or UnitedHealthcare plan.

Aetna has announced that they will waive cost-sharing for inpatient treatment of COVID-19, although this does not apply to their Medicare Advantage members.

Numerous regional and local health insurers have taken similar steps to reduce or eliminate cost sharing related to COVID-19, although many of them are focusing on telehealth as opposed to all treatment costs.

Insurers in Minnesota have agreed to waive cost-sharing for in-network hospitalizations.

It’s obviously beneficial for consumers when insurers opt to waive cost sharing related to COVID-19 treatment. But in the case of a hospital stay, the member’s out-of-pocket amount would have been a small portion of the total cost anyway, so the insurer would already have been covering nearly all of the total cost. By waiving cost sharing related to COVID-19, the insurers make it easier for people to obtain treatment, and also put themselves in a better position for potential financial assistance from the federal government, and reduce the amount that they might later have to pay in MLR rebates if total medical costs continue to be lower than expected this year (due to all of the elective procedures that have been canceled as a result of the pandemic).

Self-insured plans can opt to waive cost-sharing for COVID-19 treatment, but are not required to do so. The majority of workers with employer-sponsored coverage are in self-insured plans. Even if those plans are administered by Anthem, UnitedHealthcare, Humana, Cigna, Aetna, or a regional insurer that has opted to waive cost sharing for fully-insured plans, any decisions regarding cost-sharing adjustments on self-insured plans ultimately lie with the employer, as opposed to the insurer.

Federal government commits to paying for COVID-19 treatment for uninsured Americans

In early April, during a coronavirus press briefing, HHS Secretary Alex Azar said that the federal government will pay hospitals for treatment of uninsured COVID-19 patients. The funding will come from the Coronavirus Aid, Relief and Economic Security (CARES) Act. The government will pay Medicare rates, and in order to be eligible for the funding, hospitals will have to commit to not sending patients a balance bill — in other words, the hospital will have to accept the Medicare rates as payment in full.

There is still some uncertainty in terms of whether this policy will also reimburse doctors, or whether they’ll still have to (or be allowed to) bill uninsured patients for the care they provide (doctors typically bill separately from the hospital).

States requiring insurers to cover COVID-19 treatment without cost sharing

Some states have regulations that go even further than H.R.6201, for plans that are regulated by the state:

Treatment with no cost sharing

  • New Mexico requires health plans to waive cost sharing for medical services related to COVID-19, pneumonia, and influenza.
  • Massachusetts requires health plans to provide COVID-19 treatment with no cost sharing, although it only applies to care obtained in a doctor’s office, urgent care clinic, or emergency room.
  • Vermont is requiring state-regulated health plans to waive cost-sharing for COVID-19 treatment.
  • Minnesota asks, but does not require, insurers to fully cover the cost of testing and to “limit or eliminate” the cost of treatment. But the guidance also clarifies that Gov. Tim Walz’s administration is asking lawmakers to step in to make this a requirement.

Lawmakers in some states are working to address health coverage for COVID-19 from a legislative perspective. Examples are Ohio’s H.B.579, Minnesota’s H.F.4416, and Michigan’s H.B.5633. These are all recently introduced bills that have not yet received a vote.

Meanwhile, numerous legislatures across the country have suspended their sessions as a result of the coronavirus pandemic, so it’s unclear how much can be accomplished legislatively at the state level.

Telehealth with no (or reduced) cost sharing

Several states are requiring state-regulated health plans to cover COVID-19 telehealth with no cost sharing. (In some cases, these rules apply to all telehealth services, not just services for COVID-19.):

All three insurers that offer plans in Montana’s exchange are voluntarily waiving cost sharing for telehealth services.

Other states are asking insurers to waive cost sharing for telehealth, but have stopped short of requiring it:

During the COVID-19 emergency, the federal government has relaxed the regulations that apply to telehealth services. Several states have also taken action to make telehealth easier to access, including requirements that health insurers provide at least the same level of coverage for telehealth that they do for in-person visits, allowances for audio-only telehealth visits, permitting out-of-state telehealth services, etc.

Numerous states have issued rules designed to make it easier for medical professionals to provide telehealth services and for patients to access it — including telehealth services for medical care that’s not related to COVID-19:

IRS, HHS relax rules for HSA-qualified plans, catastrophic plans

HSA-qualified high-deductible health plans (HDHPs) have to follow strict rules laid out by the IRS. With the exception of preventive care, these plans are not allowed to pay for any services before the minimum allowable deductible is met. (The IRS sets that amount, too.)

But as a result of the COVID-19 pandemic, the IRS is relaxing the rules: HDHPs can pay for COVID-19 testing and treatment pre-deductible and the plan will continue to be HSA-qualified, which means enrollees can continue to contribute money to their HSAs. Under state and federal rules, HDHPs are currently required to cover COVID-19 testing without any cost sharing. In most states, the plans can impose their normal cost sharing rules for treatment, although plans that opt to pay for certain COVID-19 treatment pre-deductible will not lose their HSA-eligible status.

Catastrophic plans have somewhat similar restrictions: Other than preventive care and three primary care visits per year, they cannot pay for enrollees’ medical expenses until the plan deductible is met, and the deductible is equal to the annual maximum out-of-pocket established each year by HHS.

But in light of the COVID-19 pandemic, HHS has relaxed those rules. Insurers that offer catastrophic plans are allowed to alter their benefits in order to provide pre-deductible coverage for testing and treatment related to COVID-19.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) also allows people to use tax-free HSA funds to purchase over-the-counter medications as well as menstrual products. Over-the-counter drugs could be purchased with HSA funds prior to 2011, but the ACA changed to rules to require a prescription. The CARES Act reversed that rule, retroactive to the start of 2020, and also added menstrual products to the list of things that people can buy with tax-free HSA (or FSA) funds.

IRS gives employers the option to offer mid-year plan changes for health insurance and FSA elections

Under normal circumstances, employees’ health insurance choices and FSA elections must be made during open enrollment, and cannot be changed mid-way through the plan year without a qualifying event. But in light of the COVID-19 pandemic, the IRS has issued guidance that allows (but does not require) employers to offer flexibility in terms of health coverage choices and FSA elections. Employers are allowed to let employees enroll, disenroll (if they have other coverage available), or switch plans mid-year. And they are also allowed to let employees make changes to their FSA election mid-year, including starting or stopping contributions or changing the amount of their contributions for the remainder of the year.

Federal government gives people extra time to elect and pay for COBRA

COBRA is a federal law that allows people with employer-sponsored coverage (from employers with 20+ employees) to continue their coverage for up to 18 months (or 36 months in some circumstances) by paying the full premium themselves, plus an administrative fee. COBRA is typically an expensive option, but it can sometimes be the best choice, especially for people who have already met or nearly met their plan’s out-of-pocket costs for the year (if they buy a new plan in the individual market, they’ll have to start all over with the out-of-pocket costs on that plan instead).

Normally, people who are losing their employer-sponsored plan have 60 days to elect COBRA (assuming the plan is COBRA-eligible). But the IRS and the Department of Labor published guidelines in May that give people who are losing their employer-sponsored coverage additional time to elect COBRA. The new rules essentially delay the start of the 60-day window until the end of the “outbreak period,” which does not currently have a scheduled end date. So a person who is losing coverage at the end of May would normally have until July 20 to elect COBRA. But under the COVID-19 regulations, the person would actually have until 60 days after the COVID-19 outbreak period ends.

The initial payment deadline and subsequent payment deadlines have also been extended so that their clocks start ticking at the end of the outbreak period. A person who elects COBRA has 45 days from the election date to pay the initial premium, but that’s now pushed out to 45 days from the end of the outbreak period. Subsequent monthly COBRA premium payments have to be made within a 30-day grace period that starts at the beginning of each month, but that grace period is currently also measured as 30 days from the end of the outbreak period. All of this serves to make COBRA more accessible for people who are losing their employer-sponsored coverage during the pandemic.

All 50 states utilize Medicaid waivers to improve access to services

Under Section 1135 of the Social Security Act, the Centers for Medicare and Medicaid Services (CMS) can waive certain Medicaid, Medicare, and CHIP rules during times of emergency. Once President Trump declared a nationwide state of emergency, states were able to make use of 1135 waivers in order to improve access to medical services during the emergency period.

As of mid-May, CMS had approved 1135 waivers for all 50 states, as well as the District of Columbia, Puerto Rico, the Northern Mariana Islands, and the U.S. Virgin Islands. The states asked for varying provisions, including suspension of prior authorization, allowing out-of-state providers to be reimbursed by the state’s Medicaid program, and allowing services to be provided in alternate facilities.

States work to prevent policy terminations

The ACA allows for a three-month grace period for people who receive premium subsidies in the exchange. But for those who aren’t getting subsidies – which includes everyone who buys coverage outside the exchange – the grace period is generally only one month long.

In an effort to prevent coverage terminations at a time when many Americans are facing income instability, many states are asking or requiring state-regulated insurers to be more flexible with how they handle late premiums:

  • DC Health Link is pushing premium due dates for small group plans out to July 31, 2020. And the exchange is also giving all small groups a full year (until July 31, 2021) to get past-due premiums paid under an installment plan (all small group plans in DC are purchased via DC Health Link, as the District does not allow any off-exchange plans).
  • Georgia is prohibiting health insurers from canceling policies for non-payment of premiums until further notice. Delaware and Louisiana have the same requirement, for the duration of the public health emergency. West Virginia is not allowing policy cancellations that are attributed to “adverse circumstances resulting from the COVID-19 pandemic.”
  • Louisiana is prohibiting policy cancellations for the duration of the emergency period, and also requiring insurers to extend policies that would otherwise be subject to renewal conditions (such as underwriting or premium adjustments). This rule applies to short-term health plans, as long as they are renewable policies. Not all short-term plans offer renewals, but for those that do, the emergency rule requires the plan to simply extend coverage for the duration of the emergency period (ie, an extension of the existing policy, rather than a renewal, which means out-of-pocket costs would not reset). If and when the policy hits its maximum allowable duration, however, it would terminate (it’s noteworthy that the Louisiana Association of Health Plans is challenging some of the state’s COVID-19 insurance mandates).
  • Arkansas has implemented a 60-day ban on insurer termination of policies due to non-payment of premiums if the policy holder has been diagnosed with COVID-19. The 60-day window is backdated to March 11, which is the day the governor declared a state of emergency. Insurers are allowed to require proof of diagnosis.
  • Alaska is prohibiting policy cancellations for non-payment of premiums, through June 1, 2020.
  • Mississippi is also banning policy cancellations based on non-payment of premiums. The moratorium began March 14, and continues for 60 days.
  • California and Connecticut are asking all types of insurers to offer at least a 60-day grace period for premiums. Iowa, Indiana, and Missouri are asking health insurers to allow 60-day grace periods.
  • Oregon and Ohio are requiring insurers to offer a 60-day grace period for premiums. Ohio is also requiring insurers that offer employer-sponsored plans to allow an employer to keep employees on their health plan even if the employees’ hours drop below the normal minimum requirements.
  • Washington is requiring individual and small group plans to have premium grace periods of at least 60 days.
  • Colorado is requiring small and large group insurers to offer premium grace periods and waive late fees, and is prohibiting them from canceling group policies for non-payment of premiums. And until further notice, Colorado is also prohibiting individual market insurers from terminating policies for non-payment of premiums.
  • Oklahoma is telling insurers to implement a 60-day grace period for overdue premiums. And if a person is diagnosed with COVID-19, an Oklahoma insurer cannot terminate the policy holder’s coverage for at least 90 days – even if the person is unable to return to work or pay their health insurance premiums.
  • Missouri is “strongly encouraging” insurers to offer a 60-day grace period for overdue premiums.
  • Wisconsin is asking health insurers to allow businesses to keep furloughed workers (and those with reduced hours) on their company-sponsored health insurance plans.
  • Florida, Hawaii, Idaho, Massachusetts, Montana, North Carolina, North Dakota, Pennsylvania, Tennessee, Texas, and Wisconsin are asking insurers to be as flexible as possible in terms of premium due dates and grace periods in order to avoid policy terminations.
  • Maryland is banning individual market insurers from terminating policies in August or September due to nonpayment of premiums.

As is the case with any state regulations, these rules only apply to health plans that are regulated by the state insurance department. So self-insured plans, direct primary care plans (in states that have exempted them from insurance oversight), healthcare sharing ministry plans (in states that exempt them from insurance oversight), and any other non-state-regulated plan would not have to comply with these rules. But they can comply voluntarily and many will likely opt to do so.

Several states take additional actions that address the pandemic

States can take a variety of other actions to address the pandemic. Here are some examples:

  • Arkansas has temporarily suspended the requirement that a pharmacy customer provide a signature when picking up medications. This is an effort to prevent the spread of the virus via shared pens, styluses, and tablets.
  • California is directing insurers to implement protocols that will ensure access to prescription drugs and telehealth services throughout the duration of a shelter-in-place order.
  • Colorado is working to ensure health coverage for at-home treatment when a patient “can be appropriately monitored and treated at home.”
  • New Jersey is covering the cost of COVID-19 testing for uninsured residents who receive a test at a hospital or Federally Qualified Health Center.
  • North Carolina’s insurance commissioner is requesting that insurance agencies be considered essential businesses, and thus remain open in the event of a shelter-in-place order in the state.
  • Vermont has suspended routine medical provider audits by insurers and pharmacy benefits managers, in order to allow medical providers to focus on caring for their patients.
  • North Dakota is asking all insurance brokers and agents to limit contact with clients to online and phone interactions, as opposed to any in-person visits.
  • Texas is automatically renewing SNAP and Medicaid benefits that are up for renewal.
  • Tennessee is offering free COVID-19 testing for any resident, regardless of whether they’re experiencing traditional COVID-19 symptoms.
  • New Mexico has issued guidance to ensure that residents with state-regulated health plans (ie, not including self-insured employer-sponsored plans) will not be subject to surprise balance billing for COVID-19 treatment.
  • Insurance Commissioners in Colorado and Washington are asking Congress to include federal reinsurance in the next COVID-19 relief bill, in an effort to provide additional stabilization for the individual health insurance markets.
  • Washington’s insurance commissioner implemented an emergency order, valid through July 31, preventing surprise balance billing from out-of-network laboratories processing COVID-19 tests.
  • Utah has announced that the state Medicaid program will cover the cost of COVID-19 testing for uninsured residents, starting June 1, 2020.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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